The Research On Internal Governance Structure And Financial Reporting Fraud Of Chinese Listed Companies

In recent years, the happening of financial reporting fraud incidents, such as Kelon, yinguangxia, has seriously affected the healthy and stable development of Chinese securities market. The experts and scholars found that the occurrences of these incidents have great relation with the corporate internal governance structure.Under this backdrop of the times, making the research on Chinese Listed companies' internal governance structure and the phenomenon of financial reporting fraud, the analysis on the relationship between them, finding out the policy suggestions on governing financial reporting fraud, is very important.This paper is divided into five parts.the first part to domestic and foreign about the corporate internal governance structure, financial reporting fraud as well as has carried on the reorganization description about the two relations' correlation theories.The second part analyze the actuality of Chinese listed companies' internal governance structure. Pointed out that corporate internal governance structure is about the structure and function of company's shareholders, directors, supervisors, managers. The essence of corporate internal governance structure is the relationship arrangement between the client and the agent, and also is one kind of contractual relationship gathered by a serious of contract .The status quo of Chinese listed companies' internal governance structure is as follows: the irrational ownership structure, the board of internal directors control, the weakening of supervision of the board, and the lack of an effective incentive mechanism.The third part researches the manifestations, the causes and the hazards of financial reporting fraud. First the paper analysis a variety of financial reporting fraud means; the following have a in-depth analysis mainly from the perspective of internal governance over financial reporting fraud causes; and then the financial reporting fraud hazards are analyzed. Part IV mainly analyzes the relationship between the internal governance structure of listed companies and the financial reporting fraud. First it analyze the relationship between the corporate internal governancestructure and the quality of financial reporting information; then it pointout that the internal governance structure defects will result in orcontribute to the financial reporting fraud.Part V improving the internal governance management structure point of view, how to deal with financial reporting fraud of listed companies are discussed, the proposed optimization equity structure, the strength of the supervision of the board duties, the board of supervisors to improve the operational mechanism, the establishment of a scientific incentive mechanisms 4 recommendations.